“This month’s Inland Empire Purchasing Managers’ Index (PMI) was 62.3, showing an increase from last month’s 54.7“, according to a new report by Institute of Applied Research at the Cal State University, San Bernardino, (CSUSC).
The index shows an upward trend in of the Inland Empire’s business activity, especially during the last 14 months. “
“This month’s Inland Empire Purchasing Managers’ Index (PMI) registered 62.3, a sharp increase from last month’s 54.7. The index has remained above the baseline 50% mark for fourteen consecutive months, indicating that the Inland Empire manufacturing sector and overall economy have continued the trend of steady growth for over a year.”Dr. Barbara Sirotnik (Director, Institute of Applied Research) and Lori Aldana (Project Specialist, Institute of Applied Research)
What is PMI and Why it is Important?
The PMI is an economic indicator based on monthly surveys of private sector companies in the manufacturing and services sectors.
400 purchasing executives in the manufacturing sector, representing 20 industries, corresponding to their contribution to the Gross Domestic Product (GDP) in all 50 states are surveyed each month.
Five areas monitored through this survey are production, new orders, supplier deliveries, inventory, employment, prices, exports and imports. A PMI index over 50 represents growth or expansion in the manufacturing sector.
In a nutshell, PMI shows “whether market conditions, as viewed by purchasing managers, are expanding, staying the same, or contracting“.
Though, it shouldn’t be considered the only indicator to rely on when assessing the overall economic health and direction of a region, however, it is a reasonable start.
Labor issues, Inflation, supply change disruptions
The future months might see some deviations from this upward economic trend as labor issues, inflation, and supply chain disruptions may impact business activity.
“Business is fantastic. It started out slow in the first few months, but ever since November we’ve had a tear and business has been increasing month by month,” noted a business owner cited in the report.
Other economic indicators, such as Supplier Deliveries Index, Commodity Price Index, and Employment Index show that economic recovery, however, not without two accompanying issues. One is high inflation rate and the other is the continued supply chain bottlenecks.
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